WaveCrest, an issuing member of the Visa and Mastercard networks, dropped a bombshell at the beginning of January when it announced it would be withdrawing its services from the start-ups offering crypto prepaid cards. At a stroke it destroyed or seriously disrupted the businesses of crypto card companies, such as Tenx, Wirex and Xapo.
Providers such as Wirex had to introduce a facility to let users convert their fiat balances into bitcoin and then move it to the app’s bitcoin wallet.
Issuers and banks don’t like crypto
Regulators have never been big fans of prepaid cards – especially in their crypto incarnation – and have long pushed for stricter know your customer (KYC) and anti-money laundering (AML) processes when they are issued by non-bank institutions. Visa says these more stringent conditions were not being followed by WaveCrest and because of that it terminated its membership.
All this has now been followed by banks stopping crypto investors using their credit cards to buy crypto. Worse still Visa is now treating such purchases as “cash advances” and slapping an additional 5% fee on top of the 4% credit card fee. Not good, although buying crypto on credit was never a good idea to begin with. So the card issuers are not making it easy for the community to buy, with credit or, more relevantly, prepaid.
So we are still in a world where spending crypto is still far more difficult than it should be to spend, notwithstanding the efforts of Bitpay, which provides bitcoin payment services to merchants or the recent launch of LitePay for litecoin payments.
Solving the convenience problem
That’s a problem for early-stage investors sitting on substantial paper profits who want to be able to conveniently convert their crypto funds into fiat in order to spend in shops or on services. And it’s why crypto card companies have been springing up to meet the demand.
Companies with a supposed first-mover advantage have seen their prospects upended by WaveCrest’s action taken with no consultation with its crypto card customers. In WaveCrest’s defense, they weren’t given any warning by Visa.
However, the card coming soon from blockchain startup TokenCard stands out from the crowd.
Even before the WaveCrest fiasco, the TokenCard team had been preparing behind the scenes to use a different issuer. In a blog post on 5 January it announced that it had secured this new issuer, but did not let on who that might be. That’s got people talking as the community speculates on which company it could be.
Advantages of an Ethereum base
TokenCard’s offering is built on the Ethereum blockchain, which means that all ERC20 tokens, of which there are many, can be used in the app.
Assuming it delivers on its promises, app users will enjoy instant settlement when converting crypto to fiat and will be able to exchange crypto assets with one another, dispensing with the need to go no to an exchange.
The app’s wallet also includes Tether, which is useful if you want to quickly convert some of your crypto assets into a “stablecoin” during times of market turmoil. Sure, there are worries about Tether but to-date it is still working as advertised. These are just some of the features that enables TokenCard to stand out from the crowd.
Naturally, the app will let you do all the basics too. That means, for example, you can top up with fiat direct from your bank account as well as being able to use the card with the peace of mind that comes from the security feature that lets you freeze your card right from within the app, in that event you ever lose it.
Invest in ICOs direct from the app
The part investors will really appreciate is the ability to invest in initial coin offerings straight from the app wallet without having to mess with MyEtherWallet, as good as MEW is. That’s because the TokenCard is developed on Ethereum and so the smart contract can interact with token sales that are soliciting ETH contributions and can receive the token being issued in the project’s ICO.
TokenCard will be available globally, from Japan and South Korea to Europe and the US, and contactless payments will also be fully integrated.
So who has TokenCard teamed up with to bring the card we’ve been waiting for to market? Leave your thoughts below.